The 2010 Commission’s annual report to the 2010 Legislature asks for tax increases to provide more funding for K-12 education which, according to the report, “is the most important function of state government.”

Commission member Stephen Iliff, author of the minority report from the commission, says the majority recommendations are, “little different from those of the paid education lobby.” He contends the 2010 Commission has “… lost focus on the basic principles of government and economics on which our country and State were founded as well as the purpose for the 2010 Commission in the first place.”

The 2010 Commission is required by statute to monitor school district finances and make recommendations to the Legislature. One specific area of responsibility is ensuring the system is efficient and effective. Kansas Statute 46-3402 says the commission is to, “evaluate the system of financial support, reform and restructuring of public education in Kansas and in other states to ensure that the Kansas system is efficient and effective.

“The current educational system we have is a dinosaur that does not function effectively or efficiently,” Iliff says in the minority report. He says a “lockstep” union-controlled teacher pay system that rewards good and bad teachers alike is a significant part of the problem. “The elephant in the room is teachers’ salaries,” he said in a recent phone interview with KansasWatchdog.

Iliff, a certified public accountant working in the private sector, says he represents the common taxpayer and businessperson and his report’s goal is to, “remind the legislature and the Commission of the historical, political and economic principles upon which government and society are based.”

The Commission held its first meeting on October 3, 2005. Senator Jean Schodorf, R-Wichita, was the temporary chair and still serves on the commission. She said in an interview Tuesday she believes the commission cares about education and has done a good job.

“2010 believes in quality education whole-heartedly and that it’s part of the state’s obligation. I believe that too. But at this time the legislature is facing a daunting task in trying to balance the budget.”

Schodorf and Iliff did not attend the commission meeting where the report was approved, though Schodorf says she agrees with most of its findings. She said she has not yet read the minority report.

“It seems unfair for vested interests to lobby or testify when their salary comes either directly or indirectly from the taxpayer,” Iliff wrote in his report. He says he testified before a House budget committee on accounting issues. “I was surprised that those testifying for transparency and strong accounting consistency and comparability were volunteers, i.e me. On the other hand those who want the five billion dollars spent by the State on education each year to be incomprehensible were salaried employees of the school system paid with taxpayer dollars or paid lobbyists paid by union dues from employees paid with taxpayer dollars.”

Sedgwick County Commissioner Karl Peterjohn, a former USD259 Wichita School Board member, agrees with those concerns. “There is never enough money for the Kansas government school establishment’s spending plans unless it involves lobbying, lawsuit litigation, and mislabeling their opponents with ad hominem criticism.  The government school lobby continues to overlook the fact that K-12 school spending has grown rapidly and without any increased performance or accountability for decades in this state.”

The 2010 Commission is pursuing tax increases in its majority report but is noticeably silent on efforts to resolve budget issues by pursuing opportunities to reduce costs through greater efficiency, which is one of their chartered purposes.  In 2008 the 2010 Commission directed the Legislative Division of Post Audit (LPA) to do an efficiency audit of school districts. The first phase of the audit, released July 25, 2009, revealed significant differences in spending among peer districts that might indicate opportunities for more efficient use of taxpayer funds. The second phase of the audit, which was intended to work directly with schools to help them save money, was cancelled in June 2009.

Commission chair Rochelle Chronister told members that district administrators are too busy dealing with budget cuts to complete the audit. Four districts volunteered to complete the audits. The first audit, of USD 260 Derby, found about $1 million in potential savings in a district that is more efficient than its peer group.

Another indicator of potential for improved efficiency lies in the increasing amounts of districts’ unencumbered cash reserves. Districts began this fiscal year with nearly $700 million in funds not restricted for capital projects or debt service. Those balances have increased 53% over the last four years, which means districts have been taking in more money than they’ve spent. Unencumbered operating balances vary by district from $75 per pupil at USD312 Haven to $9,761 at USD502 Lewis.

The 2010 Commission report offers no explanation for ignoring those opportunities.

Opposing perspectives

Importance of education funding

Majority report: “The Legislature should refocus its revenue and funding priorities to make education Priority Number One. Education is the single most important function provided by state government. It is at its essence how we prepare for the future.”

Minority report: Iliff says, “While a moral and historically accurate, scientific and disciplined education is a very good thing, it is not the most important. Public safety, strong families, and just laws and their enforcement are far more important and in fact foundational. Without law and order and critical infrastructure, education as we know it would not be possible.”

Schodorf is the chair of the Senate Education Committee with responsibilities for kindergarten through college education in Kansas. She’s also a member of the Senate Ways and Means Committee handling broader budget issues.

“I take my duties on Ways and Means very, very seriously, as I do on education. I’m whole-heartedly supportive of public education and the state’s role in providing quality education and funding. But on the other side, on Ways and Means, it’s been very difficult. Right now we are trying to balance the budget and not do undue harm, not do great harm. So when I am on Ways and Means I feel the weight of the cuts for basic services. It’s not just education.”

Funding for K-12 education already consumes more than half of the state’s general fund, far more than the national average or any neighboring state. K-12 education has received smaller cuts in funding than other state agencies and much of the cuts have been replaced with federal stimulus funds.

Revenue sources and tax increases

Majority report: The Legislature should consider three specific revenue sources, reversing previous tax cuts, increasing the statewide school mill levy back to its former level and increasing state sales tax. “The Commission believes the revenue generated should equal the amount needed to fund the statutorily mandated base state aid per pupil (BSAPP) for the 2009-2010 school year of $4,492. This amount would have totaled approximately $314 million for the 2009-2010 school year, given the recent enrollment growth.”

The majority report takes exception with the philosophy that low taxes contribute to economic growth and high taxes detract from it. The report also claims that Kansas is not a high tax state and that high income states are more likely to be high tax states.

The majority report says tax cuts made by the Legislature over the past five years have totaled $180 million dollars and asks that several of the cuts should be reviewed and reversed. “In prosperous economic times the Legislature has been eager to reduce revenues. Now, in these difficult times, the Legislature must face the fact that it needs to replace some of that revenue.” The report does not list which recent tax cuts should be reversed.

The report does recommend an increase in the statewide school mill levy, set at 20 mills after 1996. The rate was 35 mills in 1994. Each additional mill would generate $29 million more annually according to the report. By that calculation returning to the 1994 level would generate about $435 million additional tax revenue each year.

Minority report: “The taxes recommended by the 2010 Commission will hurt everyone as well as create an environment that is unattractive to new and existing businesses.”

Iliff points out that sales taxes are regressive by nature because the poor and people on fixed incomes spend a disproportionate amount of their income on food and other essentials, all of which are taxed in Kansas. Property taxes also have a greater effect on the poor who likewise spend a greater proportion of income on housing. Income taxes hurt everyone, but, by their progressive nature, serve as a disincentive to achievement and business development.

The minority report references an October 2009 study of the results of three major tax cuts in the 20th century under presidents Harding in 1921, Kennedy in 1963 and Reagan in the 1980s. All three produced increases in wealth, prosperity and jobs. Iliff quotes President John F. Kennedy:

“The most direct and significant kind of Federal action aiding economic growth is to make possible an increase in private consumption and investment demand—to cut the fetters which hold back private spending. If Government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency. The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system.”

Kansas Revenue Secretary Joan Wagnon recently published figures on revenue “lost” to tax cuts and exemptions similar to those cited in the majority report. But Legislative Research and Department of Revenue staffers responsible for the data verified those numbers are static, taking no account of what citizens and businesses do with the money not taken by the state. Even with the tax cuts and exemptions, State General Fund revenues grew 23.6 percent from 2004 to 2009 but SGF spending outpaced it, increasing 40.5 percent.

Teachers

Majority report: The majority report includes a section listing practices that make a difference in assuring that every child receives the maximum benefit of his or her education. “Nothing impacts the quality of education like the quality of the teaching staff.”

Minority report: Iliff agrees, to a point. “True education goes on only between a teacher and a student,”  but he says that all teachers are not equal in their ability to make such a positive difference in a student’s life according to the minority report. “We have some great teachers supported by great principals. We have some really poor ones who are truly harming the students. The strong student will always make it through; but the sensitive genius and troubled slow will not.”

Local parent boards and principals, not unions, should have control over hiring, motivating, rewarding and disciplining teachers, the minority report says. If two teachers, one good and the other a poor teacher, both make the same salary their effective wage is determined by how much time they invest in their work. A teacher who spends 2,000 hours per year in class preparing for class makes an effective wage of $22.50 per hour but a teacher doing minimal work, 1,100 hours per year, makes $40.90 per hour.

According to National Education Association (NEA) data published by the Kansas Department of Education in the Kansas Education Summary, average teacher’s salary in Kansas in 2007-08 was $45,136, ranking 38th in the nation.

Iliff said that sounds bad until you adjust for the cost of living in the region, which moves the ranking up to 28th. “But cost of living is not all. Kansans are able to live close to their jobs, the traffic is light and the roads are good, which save us time.” He says when you use NEA and Bureau of Labor Statistic salary data to compare average teacher salaries in Kansas to other workers, teachers jump to number seven in ranking.

Average teacher pay, plus an employer 20 percent contribution to a defined benefit retirement seems like a very good pay rate to Iliff but he says some teachers would still be underpaid. He says teachers deserve pay for performance.

“Tenure for teachers is harmful to students,” says Iliff. And Joel Klein, school chancellor in New York City, calls tenure ridiculous. “The three principles that govern our system are lockstep compensation, seniority and tenure. All three are not right for our children.”

A 2006 Brookings Institute study of Los Angeles schools quoted in the minority report found that, “having a top-quartile teacher rather than a bottom-quartile teacher four years in a row would be enough to close the black-white test score gap.”

Other minority report recommendations

Iliff also believes schools should allow professionals teaching certification to teach subjects they are competent to teach. “CPAs can teach at the college level but not at the high school level.”

Schools must simplify the accounting and make it transparent and accessible to everyone. Iliff says this would allow schools to compete and encourage creative innovation. The Legislative Division of Post Audit has made similar recommendations in several reports.

Consolidation offers educational opportunities not available in smaller districts and improves the economies of scale.

State assessment test scores may show consistent increases but college entrance exams have made no discernable improvement. Changes made in 2005 make long-term comparisons difficult. “Test should not be changes from year to year so that true historical patterns can be seen.”

Curriculum changes are costly both in textbooks and the time it takes for teachers to retool for new lesson plans and materials. “Instead of changing science curriculum you could just make addendums for new discoveries the students ought to know or note change in theories as old ones are phased out. It is a helpful educational tool for students to understand why theories are replaced.”

More professional development should be done within the district. “Every district has super-competent teachers and principals who can train others. You don’t need to go to DC, Hawaii or other states for continuing education at taxpayer expense.”

Full 2010 Commission report

2010 Commission 2010 report –